NewTeeVee Live Panel: VCs On Where’s the Money?

After all the online video celebs, top-ranked YouTube shows and innovative startups we’ve seen today, this panel is the one that brings everyone back to reality — where’s the money? How can online video makers and startups actually make and raise money? It’s a bad time to raise money right now, but if you can explain to us why you’re an actual business and not a neat feature, then maybe we can help you out, said the panel of investors that included Dan Beldy, Managing Partner, Steamboat Ventures; Daniel Cohen, General Partner, Gemini Israel Funds; Warren Lee, Principal, Canaan Partners; Aydin Senkut, Founder and President, Felicis Ventures; James Slavet, Partner, Greylock; and Richard Wolpert, Managing Director, Mail Room Fund. Constance Loizos, Senior Editor, Thomson Reuters, asked the hard questions. Here’s our notes:

Mail Room Fund’s Wolpert: It’s more than traffic and eyeballs. How is content is not only going to drive traffic, but — what is monetization?

Canaan Partner’s Lee: Your chances of getting funded is a lot harder now with the financial turmoil. Online video is sexy but show us metrics for why you have a good standalone significant company on its own.

Gemini’s Cohen: I still think traction is the most important thing.

Mail Room Fund’s Wolpert: With the downturn the landscape has changed in the short term but not in the long term.

Gemini’s Cohen: Content business of online video is not a venture business. I invested in the infrastructure of online video space, but I would be scared to invest in the actual content space. I wouldn’t know how to do it.

Felicis’ Senkut: At least one out of five video users share video. Online video users also like to chat around online video. The new viewer doesn’t want to watch passively.

Canaan’s Lee: I am very skeptical of investing in the cable space. You have to have a great respect for the cable industry — they have strong survival instincts. You have to keep that in mind. But it is a closed system, with set-top boxes and equipment, and so its hard to push innovation forward in that environment.

Gemini’s Cohen: Hulu is not something the VCs could have done.

Canaan’s Lee: Hulu had all the earmarks of being a massive failure, and they should get a lot of credit for making it a success.